Book reviews 2127

employees and customers. The law can affect preferences and work as an expression of worthy goals and not just shapebenefits and costs. Discrimination can come from the institutional structure of society rather than simply representinggiven individual tastes. Socioeconomics recognizes the possibility of circular causation—people choose institutionsover time, but at any given time are shaped by institutions that they are born into.

This is a big book of over 700 pages. Chapters are devoted to a general discussion of fairness and well-being andlegal socialization, culture, norms and the law, and cooperation and trust and the law. Among the policy topics arethe market for babies and surrogate mothers, families, markets and the law, corporate responsibility, globalization,privatization and transitional economies.

The socioeconomic perspective disaggregates policy results. One area where this is particularly compelling isinternational trade (Chapter 13). The Theory of Comparative Advantage that is often used to justify the removalof tariffs and other trade barriers deduces that the total benefits of specialization and trade may exceed the totalcosts. It does not conclude that all individuals in an economy are net beneficiaries, though this is often ignored inpopular discussions. Socioeconomic theory calls attention to specific winners and losers. Movement of high wagemanufacturing jobs from richer to low wage poorer countries has the effect of denying any rights of labor in theproductivity of improving technology. Dallas keeps challenging efficiency as a guide to policy by asking “efficient forwhom.” While this emerges from the material in the chapter, the punch could have been improved if these insightswere summarized at the end of each chapter.

There is something in the book to upset just about every mind at rest. Students will find the lively discussions andquestions challenging and insightful, raising many more questions in turn.

A. Allan Schmid ∗Michigan State University, 1014 Walbridge Dr., East Lansing, MI 48823, United States

∗ Tel.: +1 517 3371217.E-mail address: Schmid@msu.edu

doi:10.1016/j.socec.2008.01.005

The Soulful Science: What Economists Really Do and Why It Matters, Diane Coyle. Princeton University Press,Princeton and Oxford (2007). 279 pp., Price US$ 27.95, ISBN-13: 978-0-691-12513-8, ISBN-10: 0-691-12513-9

The Soulful Science provides a comprehensive up-to-date review of research trends in the core fields of economics(economic history, economic growth, microeconomics, information economics), novel areas of economics (behavioraleconomics and experimental economics), and those fields that have steadily attracted more attention (developmenteconomics and institutional economics).

The exposition is carefully crafted as the topics are seamlessly woven to show that as different as they are in focusand approach, all fields seek to understand how people and firms make decisions, which in turn shape the resultingeconomic system.

Coyle’s smooth integration of current economic research is fundamental for her goal of communicating to academicsand non-academics that economics is more than money, math, and incomprehensible jargon. In particular, Coyleemphasizes that the ever-growing computer power, the careful compilation of household and firm-level surveys, andthe standardization of national accounts across countries over the last two decades have served as the foundation ofnew theories and to the inevitable revision of old ones. Furthermore, Coyle underscores how recent interdisciplinaryefforts that merge psychology and biology with economics have led to new areas of research that have freed economicsof its status as a non-experimental science.

For economists and social scientists, the value of the book lies in the fresh survey of most fields in economicsespecially those areas attracting larger attention. Moreover, for graduate students and the rising ranks in economics,Coyle provides a blend of anecdotes and informal insights into classic and contemporary economists whose ideas areeither too ‘old’ or too ‘new’ to be part of a regular Ph.D. program. By drawing on the contributions of Nobel laureatesto the different fields, Coyle is able to span the past, present and future of economics. This is, of course, complementedwith the work of the founders of classical economics and those who are on the frontier of their fields and possibly ontheir way to Stockholm.

2128 Book reviews

The book begins with developments in economic history and internationally comparable national accounts statisticsthat ought to serve as the foundation of a sound theory of economic growth. Then, it goes on to argue how the newfound empirical regularities, at odds with neo-classical growth theory, eventually led to endogenous growth models. Ofparticular relevance is the fact that the new models not only explain historical growth trends and variations in per capitaincome levels across countries, but they emphasize the interaction amongst individuals (through education and socialnetworks) as determinants of long-term growth. The implicit conclusion of this line of research is that the institutionalarrangement of a given country is a key factor for understanding its current standing and potential for growth.

This result connects to the chapter on the advances in development economics, a chapter which presents the historyof the views economists, notably those in international organizations, have had on poverty reduction. After pointingout the pitfalls in ‘one size fits all’ approaches to international aid or trans-continentally publicized charitable events,Coyle’s prescription for development lies in a ‘tailor-made’ assessment of a country’s institutions to determine whetherthey hamper or promote the development process.

Once the theoretically-founded strategy for development is outlined, Coyle goes on to analyze individual behavior,which in the end, through political participation and daily conduct lead to a country’s particular array of institutions.These are defined as the social arrangements that guide everyday economic and non-economic interactions.

The microeconomic overview starts by laying out the traditional neo-classical general equilibrium theory. Coyleargues that its stringent assumptions have been the cause for the frequent characterization of economics as unrealistic.One of the strengths of the book is the review of the work by behavioral economists, whose interest lies in testing thoseassumptions to determine their realism. This discussion is complemented with a review of advances in experimentaleconomics. Of particular interest here is the ability to test the outcome of different institutional settings in laboratorycontrolled conditions. This section of the book also discusses how theoretical advances in information economics haverelaxed some of the neo-classical assumptions by incorporating uncertainty and asymmetric information in the models,thereby yielding deeper insights about the emergence of certain institutions or social arrangements.

The last part of the book presents advances in evolutionary economics—described as a synergy between evolutionarybiology and economics—and institutional economics. With respect to evolutionary biology, it is argued that a sense ofsurvival of the fittest could be applied to firm dynamics among other social interactions. Coyle also documents recentdevelopments in institutional economics. However, the absence of a theoretical framework, in combination with hardto quantify notions of culture, customs, beliefs, etc., make the findings of this field rather sketchy.

In the last chapter, Coyle comments on the current standing of economics along several dimensions includingthe balance between applied and theoretical research, the use of recent econometric tools, higher computer power,better datasets, the standing of women in the profession, trends in publication outlets, and research findings that havepermeated to public policy and to the conduct of monetary policy.

In this reviewer’s view, the book misses the contribution of greater computer power to theoretical work in modernmacroeconomics. This computer power has allowed for simulations of fictitious economies that endogenously respondto changes in the environment and for policy experiments in frameworks characterized by household and firm hetero-geneity. Also, a deeper discussion of within country inequality along with theoretical advances in this topic would havebeen desirable. A recent survey of this literature can be found in Cagetti and De Nardi (in press).

Overall, the book is a wonderful journey through the frontiers of economic research, with passages that go from the‘Dutch disease’, to Central Bank independence, to the median voter theorem, to the market for lemons, to the prisoner’sdilemma, to monkeys’ innate notion of supply and demand, and to Malthus’s role in Darwin’s theory of evolution.

Reference

Cagetti, M., De Nardi, M. Wealth Inequality: data and models. Macroeconomic Dynamics, in press.

Luis San Vicente Portes ∗Montclair State University, 1 Normal Avenue, Partridge Hall 438, Montclair, 07043 NJ, United States

∗ Tel.: +1 973 655 2126; fax: +1 973 655 4456.E-mail address: PortesL@mail.montclair.eduURL: http://frontpage.montclair.edu/portesl/

doi:10.1016/j.socec.2008.01.010